Benny, here is the full text. CKFR about middle of page. I think it's my longest post yet.
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The World Wide Web Gets Down To Business
March 11, 1998
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Inter@ctive Week via NewsEdge Corporation : It's still a wild, wild Web out there. But corporate Web site budgets are going up, online revenue is rising and site personnel are more likely to be part of a company's information technology staff. In short, according to an annual survey of Webmasters conducted by Inter@ctive Week and CustomerSat.com, the Web is getting down to business.
Perhaps the biggest surprise this year is the amount of money that companies are investing in their Web sites. Last year's survey found that most Web sites were being run on a shoestring, with nearly one-third of the Webmasters responding that their budgets were less than $50,000. This year, nearly one- third said their budgets range from $100,000 to $1 million or more.
The survey found that the expense is necessary. A cross tabulation of the results showed big revenue is only realized by companies that make a substantial investment in Web resources. But the payoff can be just as substantial: Almost a quarter of this year's respondents said their sites will generate revenue in excess of $100,000, and almost 10 percent of the entire survey population said sales will top $1 million.
Overall, the total number of Webmasters reporting they are now engaged in electronic commerce went up from 10 percent to 11 percent, a small increase year to year. But the CustomerSat.com figures may mask some real growth. Respondents named all uses on their site, and all displayed upward movement. E-commerce would have to grow merely to remain at last year's level, and instead it moved up a notch vis-a-vis other uses. With site use growing on all fronts, it's hard for e-commerce to show dramatic gains as a percentage of the total.
And companies are investing for future e-commerce. Much of the beefed-up budgets, according to the survey, are going for the latest design, development, site traffic and managing, and database connectivity tools -- the latter being critical for online transactions.
Moving Into The Corporation
For a second year, research firm CustomerSat.com (www.customersat.com) of Menlo Park, Calif., conducted an e-mail survey of the 2,472 Webmasters who subscribe to Inter@ctive Week. With 33 percent of the subscribers responding, the survey tallied 800 or more responses on each of 43 questions.
From the results, it is possible to draw the following composite of the maturing Webmaster: The Webmaster is a predominantly male figure (although women nosed up their presence by two points over last year, 18 percent from 16 percent), aged 29 to 38, making between $44,000 and $53,000. In most cases, he is self-taught, either at home or on the job, and manages a site with approximately 100 megabytes of content. And he now tends to have some company -- a staff of three to four -- and, equally important, a budget of $100,000 or more.
When asked for their greatest challenge, Webmasters tended to say, " keeping up with new technologies," "keeping up with changing standards," "anticipating market trends" and "balancing business needs with limited technical resources." In other words, just plain keeping up.
One of the most distinct trends is that as the role of the Web site grows in importance, more and more Webmasters and site developers find themselves working in the information technology (IT) department, an outfit they may have once disparaged. Almost 40 percent of the respondents said they work in the IT department.
While many intranet and small company Webmasters participated in the survey, 39 percent were from organizations of 1,000 or more employees, with 17 percent from enterprises of 10,000 or more employees.
"The role of discrete Webmaster still exists at about a quarter of the sites. But their realm is being steadily absorbed by the IT manager," said Ron Rappaport, an analyst at Zona Research Inc. (www.zonaresearch.com) in Redwood City, Calif.
Return On Investment
Accompanying that migration were other developments that show the growing maturity of work on the Web. One of the clearest results to emerge was that Web site budgets are rising. Nearly one-third of the Webmasters responding last year said their 1996 budgets were less than $10,000. In 1998, 30 percent said they expect their budgets to range from $100,000 to $1 million or more.
Revenue from Web sites also is growing. Those expecting revenue from $10,001 to $100,000 went up from 24 percent last year to 28 percent this year; $100,001 to $1 million went from 13 percent last year to 15 percent this year; more than $1 million also went up, from 5 percent last year to 9 percent this year.
The expected sources of revenue in 1998 were more varied than anticipated. Forty percent expect their revenue to come from selling products online, 17 percent said advertising, 7 percent said subscription fees and 2 percent said from commissions on downloaded products. Thirty-four percent cited other sources of revenue, including selling services, consulting, education and course delivery, Web design and book sales.
An Inter@ctive Week cross tabulation of the results, however, showed that there is seldom a big revenue net if there hasn't been a substantial investment. It's a brave new world on the Web, but the old adage about no pain, no gain, still applies.
Thirty-six percent of sites garnering yearly revenue of $100,000 to $1 million or more spend $100,000 to $1 million on their sites.
Not all big spenders look to profit directly from their sites. Thirty-six percent said they spend in the high range ($100,000 to $1 million) and realize no revenue from the site -- their sites being set up for informational and customer-support purposes. Getting out timely product information and giving customers the information they need when they need it helps the bottom line indirectly, by keeping customers satisfied with the company.
Indeed, the rate at which companies on the Web are implementing e-commerce "is still relatively low. People are building their own systems, and it takes time," said Vernon Keenan, senior analyst for e-commerce at Zona.
But vendors such as BroadVision Inc. (www.broadvision.com), IBM Corp. (www.ibm.com) and Open Market Inc. (www.openmarket.com) are putting together e- commerce packages that will replace individual development efforts, speeding e- commerce's adoption in 1999 and 2000, Keenan predicted.
One indicator of e-commerce's real growth is the jump in the use of database access tools at Web sites. Little commerce occurs over the Internet without database connections to save transactions and record customer names. The survey showed data access tools being used by 41 percent of the respondents this year, up from last year's 32 percent.
"I'm glad to hear it's that high," said Tim Sloane, analyst at Aberdeen Group Inc. (www.aberdeen.com) in Boston. Using databases on the Web is a step in complexity above producing static HyperText Markup Language (HTML) pages and storing lists in flat files, he said.
Although there are gains in database use on the Web, many analysts expect even more. They believe Webmasters are actually in a consolidation phase as they evaluate the next level of development to which they want to move.
Merv Adrian, an analyst at Giga Information Group Inc. (www.gigaweb.com), said the recent slowdown in database sales appears to be a "technology pause, " as site developers digest new tools and development options. " People are still thinking about what kind of architecture they need" to put databases to use on the Web, he said.
"We're using Perl scripts," or a small application on a Web server to connect a user query to the database, said Barbara Severance, owner of Web site developer Digital Horseman in Malibu, Calif. Scripting languages have limited, English- like syntax that makes them easy to use for short server applications that pass along a user request to a particular database management system.
Alex Ionescu, part of the EDS Corp. team in Troy, Mich., that developed the popular site for Saab car owner accessories (www.saabcatalog.com), said any site intended for thousands of concurrent users will bog down unless it devises ways to store frequently asked-for pages in memory, where retrieval is fastest. And its applications need multiple connections to the database, usually through an application server, he said.
In the development tools area, vendors, such as Microsoft Corp., that extend the page layout and design capabilities of business users who want to get on the Web but are nonprogrammers appear to be reaching a mainstream market.
The survey showed dramatic gains for some vendors at the expense of others, with Microsoft's FrontPage showing big gains. It moved up from 10 percent of user response to questions on authoring tools last year to 13 percent this year. And it jumped from 25 percent of the response on a query about page design tools to 34 percent this year.
"To me, FrontPage 98 made a leap forward over the previous version. I feel I have much more control over content," said Vincent Bush, a developer at Accurate Web Design Solutions in Denver.
"They make a lot of improvements with this revision. It doesn't overwrite my code the way it used to," said Charles Letbetter, site manager at CheckFree Corp., an electronic billing and banking firm in Norcross, Ga.
FrontPage 97, the predecessor product, frustrated users by overwriting HTML tags that it didn't recognize, substituting is own plain-vanilla tags and skewing the intended appearance of HTML pages when they were published, Bush said. It nevertheless established Microsoft among the nonprogramming class of site developers.
Another gainer was Allaire Corp.'s HomeSite, which followed on FrontPage's heels with 12 percent of user response as a new entry in the authoring tool market. HotDog Pro from Sausage Software Ltd. and HotMetal Pro from Softquad Inc. each appeared to be losing ground to Allaire and Microsoft. Their market share among developers shrank from 16 percent to 4 percent and 11 percent to 5 percent, respectively.
HomeSite is growing on some developers because it allows them to author standard HTML pages quickly and "get my hands dirty" with the actual HTML coding on the page, Digital Horseman's Severance said. Web site development more and more calls for graphic arts and design skills combined with computer language programming skills.
Another factor, however, is simply the increasingly crowded market for HTML authoring tools, said Zona's Rappaport.
Maintaining Traffic Flow
This year's survey showed a direct relation between site budgets and traffic: Where there's an investment in the site, high traffic tends to be present as well, although Webmasters said it was the traffic generated by the site that helped initially to boost the budget. Sixty percent of organizations investing less than $10,000 in their sites saw traffic of 100 unique visits per day or fewer. Of those investing $50,001 to $100,000, 53 percent saw volumes of between 101 and 1,000 unique visits per day, and 14 percent saw 1,001 to 10,000 visits per day. Another 6 percent saw 10,001 to 100,000 visits per day.
There were 13 respondents who said they have sites with more than 1 million unique visits per day, but they were from the group spending more than $1 million per year on their sites.
Not surprisingly, use of site management and site tracking tools also picked up, with about 41 percent of all sites using them this year compared with just 36 percent last year.
There are two reasons why Webmasters are buying site tracking tools in greater numbers, Rappaport said. One is to find out the most popular areas of their sites and draw lessons from where users are going. The other is to better identify a population group that the site is reaching "in hopes of kicking up ad rates that can be charged on the site," he said.
The winner among site management and tracking tools appears to be WebTrends from WebTrends Corp. (www.webtrends.com). Its Web server log analyzer sells for $199 in the Enterprise Suite, giving Webmasters feedback on who is visiting the site. It represented 15 percent of such tools last year; 47 percent this year. Microsoft's tracking tool, Interse, appears to be on a decline, going from 8 percent in 1997 to 3 percent in 1998.
The value of good statistics appears to be aiding the sale of packaged tools. Last year, 13 percent of Webmasters relied on homegrown programs that extracted reports on Web server activity. This year the figure is only 7 percent.
The use of more sophisticated database and site management tools reflects the growing sophistication of Webmasters. And so do their salaries.
Approximately two-thirds make between $30,000 and $60,000: 4 percent make less than $20,000; 9 percent make $20,000 to $29,999; 19 percent make $30,000 to $39,999; 22 percent make $40,000 to $49,999; 20 percent make $50,000 to $59,999; 13 percent make $60,000 to 69,999; 7 percent make $70,000 to $79,999; 3 percent make $80,000 to $89,999; and 4 percent make $90,000 or above.
Not measured in all the numbers was the commitment to learning and the toll of long hours as Webmasters adjusted to new technology and built their sites.
"I'm working 14 to 15 hours a day to make $45,000 to $55,000 a year. I spend an enormous amount of time on the computer, and I'm constantly learning, " said Dusty Fisher, an independent site builder in Houston.
She said it's worth it, except for those days when she's dealing with an IS manager "who does not have an appreciation of the Internet as a fragile medium."
With more and more of her co-workers moving into IT, perhaps that lack of appreciation is going to change.
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